An Investor's Guide To Davos
It's that time again.
As they have done each January for nearly four decades, the globe's mover-and-shakers are gathering at the World Economic Forum in Davos, Switzerland for five days. Among the many items appearing on this year's agenda are heightened competition for key resources, the growing influence of sovereign wealth funds, and the economic and financial fallout from an unraveling credit bubble.
For investors, though, the key to getting any real value out of this year’s confab is to look past the press releases, the pronouncements, the heart-tugging speeches, and the lofty, almost new age promises of an event subtitled, "The Power of Collaborative Innovation."
Forget the conventional wisdom
Listen for voices in the wind
One of the leading antagonists at the 2007 World Economic Forum, surprising to some, was a government official named Jean-Claude Trichet. Trichet is head of the European Central Bank and he suggested that certain elements in global financial markets were "not necessarily stable," and that the "low level of rates, spreads and risk premiums" could spur a sudden "repricing."
Put Davos in its proper context
In the end, though, investors should keep in mind just what is happening at Davos. One gets the distinct impression that for many attendees, the five-day event seems more an opportunity to bask in the spotlight of global media recognition or to network with other movers and shakers than as a way to tackle these issues head on and change the world.
To be sure, some would argue that progress has, in fact, been made over the past twelve months on one key agenda item from last year's Forum, global warning. Maybe so, but other efforts aimed at reviving the Doha round of world trade talks, getting Israeli-Palestinian peace efforts moving again, and reducing poverty around the world have foundered.
Most likely, it will be more of the same following this year's event. For the majority of investors, rather than focusing on the latest from Davos, it may be a better idea to direct attentions elsewhere.
Michael Panzner is a 25-year veteran of the global financial markets and is the author of Financial Armageddon and The New Laws of the Stock Market Jungle.